Report – India could see Honda factory investment

The Indian state of Gujarat, where Prime Minister Narendra Modi comes from as a political leader, is believed to be at the tipping point of the official’s reforms. And one of the first signs from the administration might be a deal for a Honda plant in the region.

The Press Trust of India has recently reported that the state and Honda Motor are trying to come up with a deal to have an assembly facility there, citing as a source a Honda executive, who declined to be named before the official announcement is made. According to the report, the bid could be approved before the end of the month. The state already has an automotive manufacturing network, with Indian carmakers Tata and Maruti or global powerhouse Ford having factories there. Additionally, three months ago Honda Motorcycle said it would build the biggest scooter plant in Gujarat.

Honda’s auto assembly line is being planned under the Indian government’s “Mega Project” investment strategy and establishing a plant there makes sense: after all India is the world’s sixth-largest auto market. Indian motorists, getting richer by the year, are giving up their usual two-wheel driving style and in 2010 already bought over 2.7 million cars – jumping from 700,000 in 2000. Now, J.D. Power & Associates forecasts the light vehicle market to jump to 11 million units by 2020.